Taxing news for us (but not for Amazon)

So, when you filed a state tax return last year, did you include payment of a "use tax" for that Tom Clancy novel you bought online?

How about for the clothes, pet supplies, makeup, diet supplements and curved-sole sneakers that you also purchased over the Internet?

I didn't think so.

Did you even know that you were supposed to pay such a tax?

Well, you will next time. A new state law adds a line on tax returns to "remind" folks like us to declare how much we owe in use tax, which is tax not collected by a retailer. A reader saw an article about this not long ago by The Republic's business columnist, Russ Wiles, and called me.

"Is this new?" he said. "I thought if you bought something online, you didn't pay taxes."

Not exactly.

In a lot of states, including Arizona, a business like the online giant Amazon doesn't have to collect the state's sales tax. But that doesn't mean you don't have to pay it. Unlike when you go to a traditional store, however, you're responsible for collecting the tax, not the retailer.

"That doesn't seem fair," said the caller, "putting it all on us and letting the seller off the hook."

It seems fair to the Arizona politicians who want to keep doing business with Amazon.

In fact, Amazon is expanding its operation in Arizona in part because our state, unlike some, hasn't required Amazon to collect taxes. A company vice president told The Republic, "We are committed to growth in Arizona because Governor Brewer and other state officials have demonstrated their commitment to Amazon jobs and investment."

Arizona is broke, like a lot of states. All of them could use the sales-tax revenue that goes uncollected from Internet sales. In one of those states, California, Amazon is trying to get a measure on the ballot that would ask voters to repeal a state law requiring online retailers to collect sales taxes.

Arizona is more . . . friendly. At least to businesses. Less so for commoners like us.

"Figuring out how much you owe is going to be a challenge for people," said Jack Wood of the Arizona Society of Enrolled Agents

Wood added, "If you buy something online from a retailer who doesn't have a physical presence in Arizona and they don't charge state tax or the tax from the state where they're located, then you're probably liable for the use tax - the 6.6 percent tax. The safest thing to do is if you buy something online and you get a receipt, save it. It'll probably show if there was any sales tax from the state where it was charged. If there's not and there is no Arizona tax, then you should think about paying the use tax on that."

And if you don't?

Scribbling a big fat zero on the use-tax line of your tax return might be a red flag for the state Department of Revenue. Although, would the state demand a person's credit-card statements, bank accounts and debit transactions for the past year, or three years or 10 years? Seems like a lot of work for not much reward. Then again, the use tax is considered to be the most evaded tax on the books.

"States are all having the same problem trying to balance their budgets," Wood said. "There are more and more people using online purchasing, and the states aren't getting their sales tax. This thing (on the tax form) is a little reminder."

That is a nice way of saying that the people we elected are trying to scare us. Mostly because politicians are more comfortable using intimidation against constituents rather than outside businesses.

Although there's no need.

I'm sure that, like me, you will happily comply with whatever the tax man requires and not for a minute contemplate the mathematical implications of something Jack Wood mentioned in passing. He said, "This is a big topic of discussion now, but at a seminar I saw someone from the Revenue Department who told me that they process about 2.8 million returns each year. And have 93 auditors."